Jan 24, 2018
00:00:29 Hi everyone! And welcome to another podcast, another video
on this Wealthy and Wise Wednesday. Hope you're doing great and
ready to finish out the week strong. 00:00:41 So I've been thinking
about this concept for quite some time, and the concept is
basically, how we’re persuaded to invest and save by called
traditional financial advisors. And as I thought about this and
thought about this and thought about this, I came to the conclusion
that one the best things I could do are have it drawn up in kind of
a cartoon. 00:01:14 So I want you to see this cartoon. Obviously,
if you're on video, I'm going to be showing it to you here in just
a second. But if you're on the podcast, make sure you go to
wisemoneytools.com/30 so you can see this cartoon. Although I'm
going to do my best to kind of explain what's going on here and the
reasoning behind this. I think it would be great if you can take a
look at it as well. 00:01:46 
So here we have this cartoon picture
and we’re downtown New York on Wall Street and we have you as the
investor running down the middle of the street dodging all these
cars and these cars are market crashes in inflation and interest
rates, in risk, in fees, just to name some of the more obvious
risks that we take when we're investing in the traditional Wall
Street fashion. 00:02:21 Others are income for life and where
that's going to come from, the sequence of return, deflation, I
mean there's a whole slew of cars that could be on this thing as
well. And you kind of ask yourself, well, why is this guy or why am
I running down the middle of Wall Street and dodging all these
cars? That's essentially depicting that we're the ones taking the
risk when our financial advisors push us toward investing in
markets and speculation and all that stuff. 00:03:00 And, don't get
me wrong on this, because I am an investor. I like investments. I'm
not opposed to investments in any way, shape or form. I'm kind of
opposed to the traditional methods in which they're purchased
because it does, it just sends us into traffic right down the
middle of Wall Street, dodging all these cars, hoping we're going
to be okay in the end. And you'll notice at the end of the street,
you'll see this, the kind of a pot of gold is wealth. 00:03:36 Now,
wealth is…it's kind of an arbitrary word because it means different
things to different people. So I kind of like to define wealth in
one kind of succinct sentence. It's hard to say. One succinct
sentence and that is wealth gives you the ability to do what you
want, when you want, without having to worry about running out of
money. And again that number may be different for everybody who's
listening out there but that's kind of the goal in life, to get to
a point where we can sustain ourselves, where we can retire and be
able to do what we want, when we want, and not have to worry about
money. 00:04:27 And of course, we want money to last at least as
long as we do. So that's kind of the definition of wealth. So you
got this guy running down the middle of Wall Street, dodging all
the risks and things that we had to deal with as investors on their
way to wealth. But what you might not notice right away is what's
going on, on the sidewalk. 00:04:50 You notice there are people on
the sidewalk, out of traffic, and they too are making their way
towards wealth. And some of these people that might be on the
sidewalk are some of these great investors like Warren Buffett,
Charlie Munger, Mohnish Pabrai, and Guy Spier, just to name a few.
There’s plenty of them. Many of them like Carl Icahn and Ray Dalio.
I mean, great investors. 00:05:26 But what they do is they are able
to get their way to wealth and on the sidewalk, out of the traffic,
out of harm's way because of the way they do their investing. See,
most of us are really just speculators. We don't know why we invest
in things. We don't know the purpose, the rationale, and the
supporting numbers. We tend to just take a financial advisor’s word
for it and we jump in the middle of the traffic. 00:06:00 What's
interesting and the sequence or the sequel to this cartoon is the
next one where you in the middle of the traffic are trying to get
on the sidewalk. You notice that there's a lot of people getting to
wealth on the sidewalk. And so, you want to be on the sidewalk as
well but every time you get close to the curb, your financial
advisor who does the traditional style investing pushes your back
in the middle of the street and says, “No. You'll never get to
wealth if you're not dodging all this traffic.” And all you want to
do is get out of traffic. 00:06:41 And so, what obviously this
leads to is there are ways to get out the traffic. In fact, you
know who else is on the sidewalk out of the traffic? Chances are
it's your financial advisor. Certainly, all the Wall Street
Executives are walking on the sidewalk because you're paying the
fees so that they can walk on the sidewalk. 00:07:06 It’s
interesting but there's been a study on mutual fund managers.
There's not very many of them who actually put their own money in
the fund that they're managing. Now there's been an argument that
well, that's because if they had their money in there, it would
cause emotion and they might make decisions based on emotion. But
the reality is it doesn't matter. That's a horrible rationale. If
these money managers who are supposed to be so awesome especially
in these mutual funds aren't even managing their own money, they're
walking on the sidewalk so that you can keep paying your fees. You
take all the risk. They have no risk if the market goes down and
they can slowly and just methodically walk on the sidewalk towards
wealth. 00:07:57 And so, we want to be on the sidewalk. That's the
easy way towards wealth and there are certainly ways to do that and
it's kind of the stuff that we've been teaching, that you keep your
powder dry, that you keep your capital in a place where it’s
accessible, that eventually, opportunities are going to come along
where you can walk on the sidewalk and safely and predictably grow
your money to even a greater extent on your way to wealth. 00:08:29
So if we start looking at the oncoming cars. But if we look at
those oncoming cars and the different risks that we take, we're at
different stages in our lives. For instance, if we’re in our 20s
and 30s, maybe market crashes aren't going to be that impactful on
this but they’re amazingly impactful. I mean, crush us, run us
down. If we’re 5, maybe 8, 10 years away from retirement and a
market crash occurs, we may never recover. I mean, even in this
last so-called recovery, it's been a great number of years. I mean,
they've been fantastic, but it took about the first 7 or 8 of those
years of recovery just to get some of these people back to where
they were in 2008. 00:09:27 The one constant that kills us, that
kills everybody is those darn fees. And I hope you've listened to
my podcast and watch my videos on fees because that is the killer,
that's what keeps Wall Street execs on the sidewalk and you in the
middle of the road right in the traffic. So as you near retirement,
as you get to that 5, 7, 8, 10 years from retirement, this is when
you want to start getting out of traffic and at least get on the
sidewalk with some of your money so that it's not at risk. 00:10:04
In the meantime, if you're young and you're growing, building
wealth inside of a location or a vehicle where you don't have to
stay in the traffic, where you can keep the powder dry, where you
can have access to it for opportunities, where you can stay on the
sidewalk and then when those opportunities come along and like
Warren Buffett says, when it starts raining gold, you can go out
with a washtub instead of a thimble. When you can start buying $10
bills for $5, that's when you want to get your money involved and
have access to capital. 00:10:46 So I hope you take a good long
look at this cartoon depiction. I think you're going to find it
interesting and there's a lot of stories that can go behind that.
But the main thing is that you don't have to stay in the traffic.
That's where Wall Street want you, that's where your financial
advisors, for the most part, want you. And so, if you can find a
way toward wealth on the sidewalk, you've got a much easier path to
getting there. 00:11:16 So I hope this has been helpful. I hope
it’s been kind of an eye-opening as well. And like I say, take a
good long look at that and see where you fit and see what kind of
risks might be coming your way. And then hopefully, we'll have a
sequel to this. And again, in terms of how the financial advisors
just keep pushing you back into traffic when there comes a time
when you just want to be out of the traffic. So, well, until next
week. Take care.